Wednesday, June 12, 2013

Why ATRO shares will hit $60 this year

Astronics Corporation (ATRO) designs, manufactures, and markets specialized lighting, control systems, and electronics for the cockpit, cabin, and exteriors of military, commercial jet, and general aviation aircraft. Read more here

Why Buy? - ATRO has a Market Cap $575 million with P/E 25. Revenue projected to grow 18.60% this year and another 16.40% next year. Earnings estimated to increase 40.90% this year, an additional 23.60% next year and continue to increase by 19.00% annually for the next 5 years. Astronics Corporation’s first quarter earnings per share came in at 56 cents. The results benefited from strong performance from both Aerospace and Test Systems. In addition, selling, general and administrative expenses, as a percentage of total revenue, declined 120 basis points in the reported quarter, benefiting margins.

Astronics Corporation’s total revenue in the first quarter increased 13.6% year over year. Strong orders booked by the company are also evident from its growing backlog. Astronics Corporation exited the first quarter 2013 with a backlog of $118.9 million, up 3.9% sequentially.

Bullish comments from CEO - CEO Peter Gundermann said Astronics was tracking toward the high end of its previous guidance and will update its outlook in the second quarter. The revenue forecast remains at $280 million to $310 million, with nearly all of that coming from the aerospace segment. According to Motley For a modest earnings beat, the 10% jump may seem a little exaggerated, but the pieces seem to be coming together for Astronics to have a stellar 2013. Gundermann noted that sales were "strong across the majority of our markets and product lines." Combine that prospect with the promising guidance, which would seem to indicate that the second quarter has gotten off to a good start, and I wouldn't be surprised to see Astronics bump up its guidance in its next report.

Here are its key stats -  Click here

On an yearly EPS of $2.24 if you throw a PE of 25 then this stock should be trading at $56 with current estimates and considering the assumptions like management raising the guidance in 2nd Quarter as Motley predicts and couple upgrades from Wall Street Boutiques will take ATRO to $60 Plus. I bought it today at $39.65 and will add on pull backs. This stock has been doing pretty good compared to its peer in this volatile market.

Tech signs are very bullish - With a 14 Day RSI of 80 the stock closed at $39.78 and if the 14 Day RSI drops to 50 (which I doubt) the stock will be trading at $36, at which there is be lot of support for it. Keep in mind nothing goes up straight and nothing goes down forever. I liked it at $39.65 and if it drops to $36 I would add more. Coming to upside like I quoted above, it will eventually reach $60 with resistance at various levels which is obvious for any stock.

A general Caution and Advise - As I always advise in my posts, Do not chase stocks. please keep in mind that I am not a Stock Market Analyst or an Investment Adviser to count on my recommendations/alerts. As always please do your DD before investing or speculating, start with a small position, always keep your stop losses in place and emotions out. Finally thank me for your profits but do not blame me for your losses because you are the one who pulled the trigger!!!


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Who is Mr.Incredible?

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Mr.Incredible is a Momentum/Technical Breakout player who trades small/micro cap plays and who saw a 600% Growth since 2006, Yes even in this down market. I am going to post my real trades (including profits/losses) soon...As a general caution and advice Please start with a small position and always keep your stop losses in place just in case....As usual Do your DD before investing. Thank me for your profits and don't blame me for your losses because you are the one who pulled the trigger!!!